Sarasota Tax Preparation Business Attempts $4 Million CARES Act Fraud
Authorities in Sarasota, Florida, have cracked down on a tax preparation business that attempted to defraud the county of funding intended for small businesses and individuals under the CARES Act. The investigation has resulted in the arrest of eight individuals who secured $319,000 that was meant to be used as relief funds for Sarasota County's struggling businesses and individuals. Overall, the individuals arrested attempted to secure over $4 million in fraudulent funding.
The fraud operated out of the tax preparation business SRQ Financial Solutions, LLC. During the investigation, authorities uncovered 114 applications that included misleading profit and loss statements as well as made-up bank statements. In a press conference Monday, Sarasota County Sheriff Kurt Hoffman explained that although the applications were submitted by clients of SRQ Financial Solutions, the fraudulent activity was conducted solely by employees of the business.
Sarasota law enforcement worked alongside the secret service to analyze over 1,500 files, computer equipment, and other evidence collected during a search warrant executed in late February. The Sarasota County Government along with the Clerk of the Circuit Court and the county comptroller’s office worked alongside the sheriff's office as well. When authorities questioned over 24 clients who did business with SRQ Financial Solutions, some clients revealed that documents filed on their behalf were fictitious while others explain that filings were made on their behalf on businesses that were not even operational. According to the sheriff's office, the two lead investigators and other authorities “identified several suspicious profit and loss statements, fictitious bank statements, and questionable tax documents."
Under the operation, the company charged clients a $150 fee for preparing a CARES Act application. When clients were awarded the funds, the company would take a 20% profit. Clients who were interviewed explained that SRQ Financial Solutions did not ask for the applicants' financial information until after applications were submitted. In a press release by the sheriff's office, Hoffman expressed, "none of the individuals who sought services provided fraudulent information or helped in the scheme except for four individuals.” The individuals included Shaquaya J. Cooper, 25, Shaneice Rhodes, 32, Willie E. Rhodes, 57, and Eddie L. Yarn III, 37.
All the individuals who were not employed with the company but sought aid applied for relief ranging from $5,000 to $42,000. One of the individuals, Willie E. Rhodes, applied for $42,000 in aid for his non-existent consulting company and an additional $15,000 in personal aid. Cooper and Yarn both requested aid from Sarasota County using Sarasota addresses despite not living in the county.
Four other individuals affiliated with the company were also arrested. They include Perla Rhodes, 33, Maria J. Bradley, 40, Demetris N. Sheppard, 27, and Raelyn B. Tillman, 27. Perla Rhodes was dubbed the “ring leader” of the operation with Bradley, Sheppard, and Tillman working as her employees. According to arrest warrants, all four individuals were charged with fraud to obtain $50,000.
Under the CARES Act, $75 million were allocated for business owners and residents of Sarasota County. Individuals could apply for the assistance and request up to $10,000 while business owners could request up to $49,999.
During an investigation into the fraudulent claims filed, the county has uncovered roughly 200 CARES Act applications that were filed with fraudulent intentions. A majority of these requests (144) came from SRQ Financial Solutions.
